In response to the bounce in...........>

GILT SUMMARY: In response to the bounce in equities and the decline in the VIX

to around 30, global government debt markets are lacking the emotion of the past

few days. The Gilt contract opened 15 ticks lower at 121.78 but ran into a small

bout of early selling before buying arrived. At present the 2Y yield is 0.6bp

lower at 0.605% and the 10Y down 1bp at 1.511%. 

- All of the downward movement in the nominal yield space comes from the real

yield component and the 30Y breakeven is higher by a smidgeon over 2bp at 3.46%.

- Talks on the Brexit transition are underway and appear to be quite

acrimonious, with Europe playing hard-ball. This has placed small downward

pressure on sterling very early in the London session.

- There is considerable attention on equity markets and while the US equity

futures markets point to weakness at the US open, the losses are seen around

0.8% and the FTSE is currently +0.75%. 

- Halifax released January HPI at and was weaker-than-expected at 3.2% 3mY/Y.

There are no central bank speakers owing to the MPC meeting tomorrow.